Three Years Later, a U.S. Fund Firm Adds to a $351MM Deal
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Wednesday, August 18, 2021

Three Years Later, a U.S. Fund Firm Adds to a $351MM Deal

Three years after after $351-million deal, a publicly traded U.S. mutual fund firm is buying most of the rest of that target.

John Christopher "Chris" Donahue
Federated Hermes, Inc.
President, CEO, Chairman
Today, Chris Donahue (president and CEO of Pittsburgh-based Federated Hermes, Inc. [profile]), Moren Nilsson (CEO of the management of BT Pension Scheme, i.e. BTPS), and Saker Nusseibeh (CEO of Hermes Fund Managers Limited, i.e. HFML), confirm that Federated Hermes has agreed to buy BTPS' remaining stake in HTML. The deal is expected to close on August 31.

Under the new deal, Federated Hermes will pay 116.5 million pounds (about $161.5 million) for the 29.5-percent HFML stake that BTPS still owns. That comes from "an independent fair valuation" that pegs all of HFML as worth 394.9 million pounds (about $547.4 million). That valuation translates into about 0.9 percent of HFML's AUM of 43.9 billion pounds.

The deal will boost Federated Hermes' stake in HFML to about 90 percent, while the rest will continue to be held by HFML employees, through an employee benefit trust. Meanwhile, BTPS will remain a big HFML client with $12 billion in assets managed by the firm.

"We retain strong links with HFML and look forward to working with them," Nilsson states.

This followup Federated-BTPS deal comes more than years after Federated Investors bought a 60-percent stake in HFML. (That deal valued HFML at $584.8 million.) Then, early last year, Federated Investors rebranded, bringing HFML's name into the firm's new name: Federated Hermes.

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